The New Republic

The New Republic

The New Republic

Is an Amy Schumer Essay Collection Worth $10 Million?

The logic behind publishers’ massive celebrity book deals

Jemal Countess / Getty

In 2012, before the success of Inside Amy Schumer and Trainwreck, Amy Schumer sold an essay collection to HarperCollins for $1 million. Over the next year or so, Schumer turned in a few essays, but the project ultimately didn’t go far. The material was raw, so in 2013, New Yorker writer Patricia Marx was brought in for rewrites. Still, there wasn’t much progress, and the following year, Schumer canceled the contract altogether, claiming she was “too busy.” She almost certainly was: in 2014, Schumer’s star was rapidly ascending—Inside Amy Schumer had become a huge hit with viewers and critics, and she was hard at work on Trainwreck, her first feature film. This summer, Trainwreck grossed over $100 million. And then, last week, Schumer got a new book deal, also for an essay collection, but this time, the publisher was Simon & Schuster, and the deal was worth between $8 and $10 million.

All of this appeared in a report by Alexandra Alter in last Thursday’s New York Times. On one level, all of this makes complete sense. A book from Amy Schumer was probably worth around $1 million in 2012. Three years later—following the massive success of her movie and TV show—she commanded a much, much higher figure. Who wouldn’t cancel a $1 million contract if you knew you could make much, much more? (Schumer’s advance has the distinction of being the highest ever to a pop culture figure.)

And yet, on another level, everything about this story is insane. As Emily Gould tweeted last week, the Schumer saga represents “how nonsensical the publishing industry can be.” Alter’s piece is a fine tale of two book deals, yet it leaves some of the biggest questions about celebrity book deals unanswered. Is Amy Schumer’s essay collection actually worth $8-10 million? Will it make Simon & Schuster any money? Massive book deals have been a fact of life for major publishers since the early 1980s, but they’re still not particularly well understood outside of the publishing industry—in many cases, they aren’t particularly well understood inside it either.

Why dole out so much money in the first place? Overhead. Publishers have been consolidating ever since Random House bought A.A. Knopf back in the 1960s, and there’s no sign that they’ll stop anytime soon. Today, five multi-billion dollar companies control most of the trade market in America: Penguin Random House, Hachette, Macmillan, HarperCollins, and Simon & Schuster.

There are advantages to size—the ability to dole out large advances is one of many—but you have to pay for that size. The Big Five “have big overheads: they have warehouses, they have large staffs,” industry veteran and Idea Logical founder and CEO Mike Shatzkin told me. “They need volume to move through the system. And there are very few books that, on their own, deliver enough volume to be worth thinking about on an individual basis. And those books command very high prices because of the assurance that you’re going to have hundreds of thousands or millions of copies moving through your machine.”

Very few books can guarantee the kind of volume needed to pay for that overhead, so those that do command a high price: publishers are, in a sense, paying a premium for a degree of certainty that the book they’re acquiring will generate the kind of cash needed to pay salaries, rent, and hit revenue goals. In conversations with people inside the industry, multiple people told me that you “need to feed the beast” with bestsellers. And books by celebrities—particularly comics, after the smash success of Bossypants—are feeding the beast right now. Here’s Alter, breaking down the landscape:

Editors and publishers have since been betting huge sums on comedians who have the potential to become breakout literary stars, including Amy Poehler, B. J. Novak and Mindy Kaling, whose book Is Everyone Hanging Out Without Me? has sold nearly 1.3 million copies. Random House paid more than $3 million to the Girls actress and writer Lena Dunham for Not That Kind of Girl, a book of essays that has sold 525,000 hardcover copies and e-books since it was published in 2014. Penguin is reported to have paid around $3.5 million for the comedian Aziz Ansari’s recently published book about dating in the Internet era, which has sold some 282,000 copies in all formats, including audio.

Of course, there’s no such thing as a sure thing in publishing. “There’s still a lot of risk involved,” former Bloomsbury publisher and editorial director Peter Ginna told me. “The bigger the advance, the more you’re putting at risk. But the risk on Amy Schumer is less than on most midlist titles—it’s less than the risk on a first novel. The absolute numbers are much bigger. Maybe it turns out you’re only going to sell $6 million in books. That can happen. History is littered with spectacular flops. But the flops tend to come from off the wall books [that were given big advances].” Garth Risk Hallberg's City On Fire, a 944-page debut novel that was acquired by Knopf for nearly $2 million, seems to fit the profile of an "off-the-wall" book—people inside and outside of the publishing industry will be watching its performance after it's officially released on October 13th.

Massively successful books have other advantages for publishers beyond revenue. The literary agent Russell Galen told Alter that these deals help give publishers “prestige.” Ginna told me something similar: “You want to have an Amy Schumer on your list because when you’re talking to producers on the Today Show who want Amy Schumer, you can bargain with them” and get the author of a book that might not ordinarily command the attention of a morning show into a highly coveted slot.

These big books suck up resources inside a company—they are particularly taxing on publicists, who often have to travel with the author and book an endless array of media appearances—and their extensive advertising campaigns don’t come cheap. But they also solve most publishers’ biggest problem: discoverability. As someone who has worked at a small press, I know how difficult it can be to break out an unknown author or to push a midlist author to a higher sales plane. That’s not a problem with celebrities like Kaling and Fey—when someone picks up a copy of their books, they know, more or less, what to expect.

For people inside publishing companies, there are playbooks, so to speak, for books like these: publishers know how and where most readers will learn about them and they don’t have to worry about name recognition. Publishers that acquire books like Schumer’s are “paying for the luxury of not having to market the book so much—or to be able to have an easier time marketing it,” says literary agent Kate McKean.

In other words, publishers are paying for security and (relative) certainty. But are they paying too much? The biggest question about deals like Schumer’s is if anybody ends up actually making money.

For many inside and outside the industry, the success of a book is judged by whether or not it has “earned out” its advance. Advances are on royalties—most hardcover books receive 10 percent royalties for their first 5,000 sales, 12.5 percent on their next 5,000, and 15% for everything after that, all calculated off of a book’s list price. When the number of these slices of sales adds up to the amount of the advance, the book is said to have “earned out.” And whenever a deal like Schumer’s is made, many people turn to their friends or colleagues (or to Twitter) and sigh, “Well, that will never earn out.”

Here’s the thing with mega-advances, though: they’re not supposed to earn out. Neither the agent, nor the publisher, nor the author expects them to. The actual negotiations between an agent and publisher are done behind closed doors, but Shatzkin told me that the publisher and the agent most likely “agree on the number of copies that they think the book is going to sell and what the revenue is. Then they fight over what portion of the revenue the author is going to get as an advance.” The advance—plus, in some cases, rights sales—is all the money an author expects to earn from a book’s publication, making it more akin to a Hollywood contract than a traditional book deal.

And just because a book doesn’t earn out doesn’t mean it’s not profitable. After Lena Dunham received a $3.7 million advance back in 2012, Jason Pinter did the math for The Huffington Post:

Let's assume Dunham's book sells 300,000 copies in hardcover at $25/book and another 150,000 in paperback at $14/book (fewer sales than Tina Fey, still hefty sales but ultimately realistic):

300,000 hardcovers at $25 with a 50 percent discount =

$3,750,000

150,000 paperbacks at $14 with a 50 percent discount =

$1,050,000

Total sales revenue: $4,800,000

Taking out Dunham's $3.5 million advance, that leaves:

$1.3 million in revenue

This is a sizable chunk of money for 450,000 books, even if you then factor in the $1 to 2 it costs to print a book and the costly marketing campaign expected to support it, as Pinter goes on to note. Even with the risks involved, it’s considerably more revenue than publishers expect to generate from most of the rest of their list. “Don’t confuse earning out with profitability,” Shatzkin told me. And judging by sales records—to say nothing of foreign rights, film rights, or audio sales—many of the books that have received large advances from publishers over the past few years have been fabulously profitable even if they almost certainly did not earn out.

Because of the large advances and the marketing campaigns, publishers typically end up generating considerably less revenue per copy sold than they do from books with smaller advances. But volume ultimately wins out. If publishers are aware that a diverse list is ultimately a healthy list, they’re still particularly attracted to books that will generate a lot of revenue, even at a lower margin. “In some ways,” Ginna told me, “the publisher would rather pay a $5 million advance on a book where they’re going to make a $500k profit on millions in sales than pay a $50,000 advance on a book that might earn them $100,000 if it does really, really well.”

Of course, not everyone agrees. HarperCollins’s David Hirshey was sardonic about losing Schumer’s book, telling Alter “I was thrilled to cost one of our competitors $9 million. In publishing it sometimes makes more sense to be behind the curve rather than ahead of it.”

Schumer’s deal with Simon & Schuster is far from the value that HarperCollins got back in 2012, but history suggests it will still generate an enormous amount of revenue for the company, even if that revenue comes at a premium. Deals like Schumer’s generate the revenue needed for gargantuan publishers to maintain the massive scale at which they operate—these are costly deals, but they’re calculated and there are only so many people in the world who can generate the kind of sales Amy Schumer is expected to. So, while it’s sometimes better to be “behind the curve,” now might not be one of those times. Even if Schumer’s book ultimately performs below expectations, her advance has set a new standard: celebrity books just got a whole lot more expensive for publishers.